A new licensing scheme is coming into force in Scotland to regulate short-term lets. The scheme requires hosts of self-catering accommodation to have a licence in place to accept bookings and welcome guests. This article explains who needs to apply for a licence, when the deadlines are, and how to apply.
A new licensing scheme is coming into force in Scotland to regulate short-term lets. The scheme requires hosts of self-catering accommodation to have a licence in place to accept bookings and welcome guests. This article explains who needs to apply for a licence, when the deadlines are, and how to apply. The Scottish Government has also produced a Guidance document that can be found here. Our FAQ page can be found here.
Do I need to apply for a licence?
The licensing scheme applies to the whole of Scotland, so hosts who let out their properties on a short-term basis anywhere in the country may need to apply for a licence. Some residential accommodation is specifically excluded (such as hotels, hostels and caravan sites), as are certain types of tenancy arrangements, but most other hosts must apply for a licence.
For the purposes of the licensing scheme, a short-term let is defined as "the use of residential accommodation provided by a host in the course of business to a guest", where all of the following criteria are met:
- The guest does not use the accommodation as their only or principal home;
- The short-term let is entered into for commercial consideration;
- The guest is not an immediate family member of the host, sharing the accommodation with the host for education purposes, or an owner or part-owner of the accommodation;
- The accommodation is not provided for the principal purpose of facilitating the provision of work or services by the guest to the host (or another member of the host's household);
- The accommodation is not excluded accommodation; and
- The short-term let does not constitute an excluded tenancy.
When is the deadline for the licence?
The licensing scheme comes into effect in three phases, starting on 1 October 2022.
From 1 October 2022
- New hosts: From 1 October 2022, new hosts letting out property for the first time must have had a licence in place before taking bookings and receiving guests.
- Existing hosts: Where the property was previously used by guests on a short-term basis, you have until 1 October 2023 to submit your application to the relevant local authority. If you apply for a licence during this period, but the application is refused, you must stop operating within 28 days.
From 1 October 2023
- New hosts: As before, if you were not letting out your property prior to 1 October 2022, you must have a licence in place to accept bookings and receive guests.
- Existing hosts: To continue taking bookings and receiving guests after 1 October 2023, you must have submitted a licence application to the relevant local authority before 1 October 2023. If an application has not been submitted by this date, you cannot take bookings and receive guests until the licence has been granted (in other words, the licence application will be treated in the same way as for a new host). If a licence application is refused, you must stop operating within 28 days.
1 January 2025
- All hosts: By 1 January 2025, all hosts must have a licence in place to take bookings and receive guests.
How do I apply for a licence?
Before applying for a licence you must determine which type of licence you require. There are four types of licences:
- Licence for home sharing (where you let out part of your home to a guest who occupies the property along with you);
- Licence for home letting (where you let out your entire home while you are not occupying it);
- Licence for home sharing and home letting (a combination of licences 1 and 2 above); or
- Licence for secondary letting (where you have an additional property which you let out to guests).
You must submit an application form to the relevant local authority to obtain a licence. Along with the application form you will be required to provide information about the property, the people involved in letting it out, and details about the property's safety compliance.
If you have multiple properties, you will be required to submit an application for each property to the relevant local authority.
You may also need to think about whether planning permission is required for your property. We discuss planning permission and control areas in this article in our short-term lets series.
Each local authority will have slightly different fees and requirements, so if you have multiple properties it will be essential to ensure you follow the correct procedure and pay the correct fee for each local authority.
At the same time as lodging the application form, you will also be under an obligation to display what is called a Site Notice on or near the property (which gives notice to neighbours that an application has been made). That Site Notice must be on display for 21 days, and there is a period of 28 days within which objections to the application may be lodged.
Thereafter, it will be for the local authority licensing committee to determine whether or not the application should be granted (and the committee may convene a hearing to determine the application).
Where a licence is required, it is a criminal offence for a host to operate without one, so obtaining a licence in good time is important.
Has the licensing scheme been challenged in court?
Yes, but that does not mean the licensing scheme (and the deadlines mentioned above) do not apply. On 8 June 2023, Lord Braid issued his judgment in respect of a legal challenge that was taken against City of Edinburgh Council's short-term let licensing policy. The judgment can be found here. It is important to note that this judgment relates only to the City of Edinburgh Council's licensing policy. Whilst the Council did require to make changes to its licensing policy, this judgment has no impact on the wider short-term let licensing legislation.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.